Press Room
Recession continues to put thousands into insolvency
Mike Gerrard, a personal insolvency partner at Grant Thornton
comments on the latest personal insolvency figures:
"The increase in Q3 2009 personal insolvency figures highlights
the growing financial turmoil being felt throughout households
across England and Wales. The figures are on the increase, partly
due to the inclusion of Debt Relief Orders for the last two
quarters, which has enabled more individuals in difficulty to
easily access an insolvency process. Households across the UK are
still continuing to struggle to make ends meet as unemployment
levels rise and banks adopt more stringent lending criteria."
"I fear the worst is still yet to come as unemployment figures
continue to increase. In the 1990s recession, we saw the peak
in insolvencies occur two years after the worst of the slump had
passed," Gerrard concluded.
The Q3 2009 data, issued today by the Insolvency Service and
analysed by Grant Thornton's Personal Insolvency practice, shows
35,242 individuals entering into an insolvency process, up
28.2% on the corresponding quarter of the previous year
(27,488).
Individual Voluntary Arrangements
IVAs have increased by 1.3% on the previous quarter (12,225) and a
significant increase of 20.9% on the corresponding quarter of the
previous year.
Mark Allen, Head of IVAs at Grant Thornton says, "We are seeing
more people entering into IVAs as lending criteria tightens, and
brings an end to the days when credit was readily available to
repay existing liabilities. The climax of this debt journey coupled
with the economic slowdown has hit households hard resulting in the
necessity for a solution to end their financial problems."